Page 3 - OCS Workbook - Day 1 Suggested Solutions (May 2018)
P. 3
SUGGESTED SOLUTIONS
Question Response
How profitable was Mansako in L$3.5m profit in 2016 growing to L$6.5m in 2017 (p17)
2016 and 2017?
Did revenue increase or decrease • Increased by approx 8% (p17)
in 2017? Why? • Not told why but presumably a mixture of (1) still
recovering from slump in 2012-2015 (2) New designs (3)
Growth in Asian markets.
Is revenue expected to increase or • Increase from L$219m to L$232m (p23)
decrease in 2018? Why? • Not told why
Is Mansako cash rich? Cash up from L$18m to L$24m
What is the rate of VAT in Not told in tax exhibit.
Lowerland?
Which products are forecast to Large Totes bags (p22)
generate the highest gross profit?
Which products have the highest Medium Totes bags (p22)
gross profit margins?
Which products have the highest Medium Totes bags (p22)
C/S ratios?
How are overheads absorbed? Standard absorption costing (p12) but not given any further
details as to how.
What problems can arise when We are told that discounting generally can amount to
deciding to have discount outlet “brand cannibalisation” (p16) and that outlets can be
stores? “brand-killers” (p24) as they:
• Can devalue the brand
• Encourage consumers not to buy at full price
• Make luxury items too accessible
KAPLAN PUBLISHING 45
